Singapore Hedge Fund

Alternative asset management in Singapore

Recruitment starting again for hedge funds based in Singapore and Hong Kong.

From, some good news on Asian Hedge Funds with new activity noted in Singapore and Hong Kong. The dark days may at last be over for Asia’s hedge fund sector, but recruitment is still selective, senior and sales-focused, with a real recovery not expected until next year.

Hedge funds are making a minor comeback after suffering their worst year on record in 2008, outperforming global benchmarks and experiencing an inflow of new assets, according to data provider Eurekahedge.

Asia has experienced a lot of the recent action. Winton Capital Management, for example, is starting a new fund in Japan and hiring staff in Hong Kong – its expansion coming just months after rivals like GSO Capital Partners, HBK and Ramius retreated from the region.

And ex-bankers are seizing the opportunity to start up their own firms in Asia. The list of budding fund managers includes: Nick Taylor, ex-head of Citadel Investment’s principal investments business in Asia and Europe; Shafiq Karmali, a former Goldman Sachs trader; and Edwin Wong, previously a Lehman Brothers MD.

Hedge fund recruitment is for now small-scale and focused on the front office. Jared Ng, regional consulting director, PeopleSearch explains: “Because short-term revenue is essential for the survival of companies to meet their short-term liability, revenue-generating jobs are more in demand. As a result, there have been more openings for sales positions.”

Peter Douglas, Asia Pacific council member for the Alternative Investment Management Association, says funds want experienced professionals who can hit the ground running. “In Singapore, Artradis, for example, has been taking on some senior people, basically taking advantage of a cyclical opportunity to add talent that’s now available,” he adds.

Funds that have not been so badly affected by the financial crisis are starting to recruit again after lying low for the past nine months, says Angela Kuek, manager, banking and financial services at Hudson in Singapore.

Douglas thinks the current fund inflows in Asia are coming mainly from specialist investors. The “real volume” is likely to return next year when more capital enters the market. “Asset size directly drives revenues and therefore the capacity and inclination to hire,” he adds.

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Green shoots for Hedge Fund Jobs

From our good friends at FHN…It is far from the go-go years of 2006 and 2007 for those looking for jobs with alternative investment firms. Yet, rays of silver are starting to peak out from under the economic crunch clouds.

That’s what Robert Olman, founder and president of Alpha Search Advisory Partners is beginning to see.

Olman told that he is seeing more appetite among hedge fund firms, not only for hiring personnel, but also for acquisitions.

Distressed debt, global macro, high-frequency trading and emerging markets, are the top strategies for hiring and for acquisition, Olman said.

“That’s followed by very sector specific equity long-short, financials being top of the heap,” he said.

Alpha Search is highly specialized, placing only portfolio managers and senior analysts with a track record of generating trade ideas, as well as risk managers and marketers. Most of those placed by the firm have an average of 7 years or more experience, Olman said.

In those specializations, Olman said, “we are seeing the hedge fund managers now creating strategic plans for hiring. We’re getting offers coming in and acceptances.”

But the recession has wrought changes to the hiring process.

“Compensation is down 20% to 25% in terms of initial offers and targeted bonuses,” Olman said.

Alpha Search recently started up an advisory service for consolidating hedge fund firms as a natural outgrowth of its recruitment business.

“We have funds with $1 billion to $2 billion in assets under management, funds that are looking at acquiring $200 to $600 million AUM funds, basically single manager, single strategy funds, in strategies or asset classes they don’t cover,” Olman said.

“It’s a given now that size does matter,” he said. “The bulk of money coming in is going to larger funds, while smaller funds are competing for an ever-shrinking pool of capital.”

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A new (and some old) rogue traders

PVM Oil Futures Limited said on Friday Steve Perkins, a senior broker based at the firm’s London office, was responsible for unauthorized Brent crude futures trades which landed the firm with a loss of nearly $10 million.

The loss, however, was relatively small compared with other trading scandals in the past, often costing companies billions of dollars.

Following is a list of some of the major financial market trading scandals in a chronological order.

May 2009 – A former Morgan Stanley trader, who built up a hefty unauthorized oil futures position after a long liquid lunch and then hid the deals overnight, earned a ban from Britain’s financial watchdog.

The Financial Services Authority (FSA) said in May David Connor Redmond was a freight and oil trader with Morgan Stanley when he took a lunch break of more than three hours on February 6, 2008. The size of the loss was not disclosed.

January 2008 – French bank Societe Generale said unauthorized trade by a single dealer had caused it a 4.9 billion euro ($6.87 billion) loss. The loss caused by Jerome Kerviel, then a junior trader with the bank, resulted in the resignation of chairman Daniel Bouton.

Kerviel was freed from prison in March 2008.

November 2006 – Mitsui & Co, Japan’s second-biggest trading house, shut Mitsui Oil Asia (MOA) after the Singapore office racked up losses amounting to $81 million in naphtha trading up to November 17, 2006.

Noiyuki Yamazaki, who made false accounting entries, was sentenced in 2009 to five years in jail.

March/April 2006 – Hedge fund Amaranth Advisors LLC and its former head trader, Brian Hunter, made up to $6.4 billion in losses from natural gas contracts before it folded in 2006.

In July 2007 the Commodity Futures Trading Commission sued Amaranth and Brian Hunter, alleging that they tried to manipulate natural gas futures prices.

June 1996 – Japan’s trading house Sumitomo Corp suffered a $2.6 billion loss over 10 years from unauthorized copper trades, primarily by chief copper trader Yasuo Hamanaka.

Sumitomo fired Hamanaka, once dubbed “Mr Five Percent” because his trading team was believed to control five percent of the world’s copper trading. He was jailed for eight years.

September 1995 – Japan’s Daiwa Bank suffered a $1.1 billion loss from unauthorized bond trading by Toshihide Iguchi, one of its executives in the United States. He was imprisoned in 1996.

February 1995 – One of Britain’s oldest investment banks, Barings Plc, collapsed after lone futures trader in Singapore, Nick Leeson, lost some $1.4 billion in derivatives trading. Leeson was jailed in Singapore. Barings was sold to Dutch bank ING for one pound.

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Betting on the the best performance for 10 years?

It is not just about green shoots anymore…Hedge funds will likely deliver their best first-half performance in a decade, as investors renew their faith in the sector in the wake of last year’s disastrous losses. According to Hedge Fund Research (HFR), the Chicago-based research firm that compiles daily statistics on performance, Hedge funds worldwide returned 5.63 per cent to their investors in the year to last Thursday.

Strategies that forecast big directional market moves made profits of 12.52 per cent over the period as equity markets in Europe, the US and Asia-Pacific posted strong gains and liquidity gradually returned to the credit markets. Actually, confidence in hedge funds returned in a single day in March, when the US Government unveiled the second strand of its Trouble Asset Relief Program, said one hedge fund chief executive.

Toscafund, the West End fund run by former Commerzbank banker Mehmet Dalman, was most recently understood to have improved by more than 50 per cent since January.

According to HFR, energy hedge funds, convertible arbitrage and Asia investment funds have all posted strong gains this year. Besides, hedge fund investors lost an average of 18.9 per cent last year, as the sector plunged to its second annual loss and confidence in alternative asset management hit rock bottom.

HFR said that the total funds under management, which at its peak topped $2 trillion, decreased to below $1.5 trillion, as panic-stricken investors rushed to take back assets. In addition, Man Group, Brevan Howard, Lansdowne, Marshall Wace and CQS have announced their opposition to an EU draft policy on Alternative Investment Fund Managers, which they say is flawed and has been rushed through with little consultation.

The proposed directive, which has caused consternation across the industry, imposes severe new reporting requirements on funds and regulates them and their managers as never before.

with e-commerce journal

Jean Viry-Babel
senior partner
VBK partners

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